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- [00:01]
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- [00:32]
Alex Osola
Disney names its head of theme parks and cruise ships as the new successor to CEO Bob Iger.
- [00:37]
Ben Fritz
They've tried to set Josh d' Amaro up for success. He's going to officially take over from Bob Iger in March, and Iger will remain on the board until December, at which point he's supposed to be completely gone.
- [00:47]
Alex Osola
Plus, Walmart hits a $1 trillion market cap while software stocks sell off and the House votes to end the government shutdown but for negotiations over immigration enforcement. It's just the start. It's Tuesday, February 3rd. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world today. Disney has named Josh d' Amaro as its new CEO, putting the man who has been in charge of its theme parks and cruise ships atop America's best known entertainment brand. A. I'm joined now by WSJ entertainment reporter Ben Fritz. Ben D' Amaro has worked at Disney for 28 years. He spent most of that time working on theme parks. How does that prepare him for the CEO role?
- [01:35]
Ben Fritz
Well, theme parks have become Disney's most important business. They now, together with consumer products, which Josh Tomorrow also oversees, account for the majority of Disney's profits, which is a big change. It used to be television, so he now knows very well the most important business for Disney. Obviously, d' Amaro has less experience in the entertainment side of Disney, the movies and television. But people who've worked with him said he gets along really well with creative talent. And of course, Disney has appointed one of its top entertainment executives, Dana Walden, to be president and she's going to work closely with him.
- [02:11]
Alex Osola
What do we know about how d' Amaro will approach the CEO role? Has he said much about that?
- [02:16]
Ben Fritz
Demaro has not said anything exactly about how he'll do it, but I've spoken to a lot of people who've worked with him over the years and they say that he is a very like strategic, financial minded thinker, but he really knows how to get along with anybody who he needs to. He's got very high charisma. And, you know, that's an important part of leading an entertainment company, especially an entertainment company that is so well known to the public. You'll have to be a public ambassador for Disney just as much as he has to be a leader internally.
- [02:49]
Alex Osola
Last time Disney chose a new CEO, it didn't go super well. The company named previous parks boss Bob chapek as its CEO in 2020, only to fire him and bring back Bob Iger two years later. Is there a concern that something similar could happen this time?
- [03:03]
Ben Fritz
Look, I think Bob Iger knows that it's a real blight on his resume, how badly it went last time. And everybody close to the company is determined that it goes smoothly this time. And so I think you'll see them put a lot of effort into it to do everything they can to make sure Josh tomorrow is set up for success and at minimum, to let him succeed or fail on his own and not feel like Bob Iger still looking over his shoulder, which is what happened to Bob Chapek. There's a lot of pressure on Iger to do it smoothly this time, and people I know who've spoken to him say that he understands he can't screw it up again.
- [03:37]
Alex Osola
How have investors responded to d' Mauro being picked?
- [03:40]
Ben Fritz
Investors have been very sour on Disney for quite a while. Its stock is down by nearly half from 2021, and it's been basically stagnant for. For the past three and a half years since Bob Iger returned. They're just really concerned that the transition from linear TV to digital is just really tough for every media company. And while it's leaning further into parks, parks are very vulnerable to the state of the economy. If there's a recession, people go to the parks less often. If we have fewer foreign tourists coming, which is actually happening right now, that can impact the parks. So I say Josh, tomorrow has a lot of work to do to get investors on board with Disney again.
- [04:17]
Alex Osola
That was WSJ reporter Ben Fritz. Thanks, Ben.
- [04:19]
Ben Fritz
Sure. My pleasure.
- [04:21]
Alex Osola
In an interview today at the Wall Street Journal's Invest Live summit after Disney's announcement, activist investor Nelson Peltz predicted that history would repeat itself.
- [04:30]
Nelson Peltz
Iger needs a reason to stay on. And if he put the person in charge of entertainment as the CEO, he wouldn't have an excuse to stay on.
- [04:42]
Alex Osola
Peltz has a history with Disney and Iger. He twice tried to force his way onto the board of Disney and fought with Iger over who would take over the company. Investors backed Iger and the board. Peltz's firm, Tryon, no longer has a stake in Disney. Disney didn't immediately respond to a request for comment on his remarks. French authorities have raided the Paris office of the online platform X and called in Elon Musk for a voluntary interview. It's part of an investigation opened last year into alleged bias in the platform's content algorithm. The investigation is now also looking at the platform's responsibility for sexualized deepfake images produced by its Grok chatbot. Prosecutors are investigating other potential charges, including sharing child pornography and Holocaust denial, which is illegal in France. X described the raid as a, quote, abusive act of law enforcement theater and called the French allegations baseless. PepsiCo says it'll cut prices by as much as 15% on snacks like Lays and Cheetos after customers complained about high prices. The affordability push is just one way Pepsi is trying to improve sales growth. The strategy follows a December agreement with activist investor Elliott Investment Management that included a pledge from Pepsi to improve performance in its North American food business. And Walmart has joined the trillion dollar club. Today it became the first traditional retailer to hit a trillion dollar market cap. Its stock has surged in recent months as investors are enthusiastic about the growth of its online business and Walmart spending on automation and AI to improve its efficiency. Doug McMillan, who stepped down as Walmart CEO on Saturday, talked about the company's E commerce push in groceries in a recent interview with the Journal.
- [06:27]
Nelson Peltz
We thought in the United States we could win food E Commerce. We had great food close to people and people were saying well you're not going to put bananas in a brown box and ship them through FedEx, so how would you even do E commerce food? But we knew there was a way to do this that would leverage the stores and would involve last mile delivery.
- [06:47]
Alex Osola
Walmart shares finished the day up 2.9% with a market cap of $1.02 trillion. Elsewhere in markets, it was mostly a down day. The Nasdaq led the losses in the major indexes and closed down 1.4%. Merch Markets Reporter Hannah Aaron Lang says it's another tech led sell off.
- [07:04]
Hannah Aaron Lang
Today there was some news from Anthropic that its artificial intelligence tools can now automate high stakes legal tasks including contract reviews, compliance workflows. That has really amplified concerns that were already floating around among investors about software companies. Concerns that artificial intelligence tools will eventually make a lot of software redundant or obsolete. So software and data services Stocks S and P Global Equifax, the credit reporting company Intuit which is the name behind TurboTax. Those all got hit pretty hard today. Those declines also included fund managers that bet heavily on software companies. That's names like Blue Owl Capital, which dropped roughly 10%.
- [07:48]
Alex Osola
Coming up, why Argentina's president wants citizens to take their secret stashes of US Dollars to the bank. That's after the break.
- [07:57]
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- [08:12]
Alex Osola
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- [08:13]
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- [08:36]
Alex Osola
In Washington, former President Bill Clinton and former Secretary of State Hillary Clinton reached a deal to appear for depositions in the House investigation into Jeffrey Epstein. The interviews are scheduled for later this month. The deal stopped a looming contempt of Congress vote against the Clintons, which could have allowed lawmakers to refer the matter to prosecutors or seek enforcement through the courts. The Clintons have said they had no personal knowledge of Epstein's criminal activities. Their lawyers have said the House subpoenas don't have a legitimate legislative purpose. And the House passed a bill to end the partial government shutdown. The House voted 217 to 214 on the $1.2 trillion funding package, and President Trump signed it into law this afternoon. Lawmakers are now set to negotiate over possible new restrictions on immigration agents that Democrats have demanded. In international news, tensions have escalated in the Persian Gulf. The US Shot down an Iranian drone aimed at the aircraft carrier USS Abraham Lincoln. And hours later, armed Iranian gunboats threaten to board and seize a US Flagged tanker. A US Destroyer escorted the ship to safety. The provocative moves come at a sensitive moment. The US And Iran are exchanging threats even as they explore a diplomatic solution to the recent conflict. A meeting between senior officials from the two countries has been scheduled for Friday. In Turkey, Argentine President Javier Milei has a problem. He has a fan in President Trump and is working to win over global investors. But now he's trying to convince Argentines, scarred by decades of economic crises to stop hoarding their US Dollars. And they've got a lot of them. More than $250 billion stashed at home and in offshore accounts and safe deposit boxes. That' six times the reserves of the country's central bank. I'm joined now by WSJ reporter Samantha Pearson. Samantha, why does Milei want to get these dollars back in banks?
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Samantha Pearson
So since Milei took over in December 2023, he's basically been trying to fix Argentina's economy, and that's a big job. He's been trying to stabilize the currency, bring down inflation, and basically gain credibility. But one big thing that he wants, obviously, is growth. It eases the pain of the austerity measures that he's been passing. The banks kind of have their hands tied at the moment in terms of how many loans they can give out to businesses, how much export credit they can extend, which is obviously very important for Argentina. Argentina is a big exporter of commodities. You know, there's a quarter of a trillion dollars sitting in people's homes in safe deposit boxes, basically not in use in the formal economy. So if the banks can get some of these US Dollars back in house, they can then lend more out, and that helps businesses expand, that helps exporters have more kind of liquidity, and that all, in theory, generates growth, and that's good for the economy and good for Malay.
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Alex Osola
One big problem here, of course, is that Argentines are extremely skeptical of banks due to many years, in fact, decades of economic crises. So hoarding cash is like kind of a national pastime. Where do people hide their cash? Is it like, all under mattresses?
- [11:52]
Samantha Pearson
The only place that I think people don't hide money is under the mattress, because that's, I think, the first place that burglars would look. But we had so many crazy examples. We had people burying money in their garden. They hide them in the ceiling, in the walls, and special compartments in wardrobes. We met one guy who hid it in an unused washing machine, another person who hid it in an oven that wasn't being used. And everyone's kind of proud of their little hiding place.
- [12:18]
Alex Osola
So one risk in hoarding money like this, besides forgetting where it is, is that digging it up for these families can actually come with risks because the government can prosecute them for unpaid taxes. How is Milei encouraging people to do it anyway?
- [12:32]
Samantha Pearson
Precisely. That's the problem, right? So what Milei has been trying to do, and which other governments have also tried to do, is holding these kind of tax amnesties. So he'll say, you can bring $70,000 and we won't ask any questions. So you can bring that into the banks, and then you can use it to buy whatever you want. The problem is that previous governments have done the same thing and then try to go after the people that had just declared all this cash and assets. So people are very, very nervous about believing in these amnesties. But I think the important point is that people are starting to believe a little bit more in Melay because of what he's trying to achieve in the economy.
- [13:07]
Alex Osola
That was WSJ reporter Samantha Pearson. Thanks, Samantha.
- [13:10]
Samantha Pearson
Thank you.
- [13:11]
Alex Osola
And that's what's news for this Tuesday afternoon. Today's show is produced by Pierre Bienname with supervising producer Tali Arbel. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning.
- [13:22]
Samantha Pearson
Thanks for listening.